Billionaire real estate investor Sam Zell continues to pull no punches on the problems for commercial real estate developers, in large part caused by them sitting on scores of abandoned former retail sites.

"In the last 12 months the liquidity of the commercial real estate market has definitely been reduced," Zell told a crowd of onlookers at the SALT conference on Wednesday. "Twelve months ago we would be liquidating and put a property up for sale, we'd get ten buyers -- now we put a property up for sale and we look for a buyer. Again, the question is where is the demand? The demand is not growing commensurate with our ability to create new space."

Zell's comments are in line to ones he made to TheStreet just a few weeks ago. 

"I doubt they can find other viable tenants, other tenants that can generate the type of traffic that a Macy's (M) or a Sears (SHLD) have historically created," Zell told TheStreet about developers holding mall-based real estate. 

Zell's blunt comments are rooted in a heavy dose of commonsense. A wave of retail bankruptcies and mass stores closures by companies like Macy's due to the shift to online shopping has caused a ton of new commercial property to come onto the market in the U.S. Finding takers for the space -- much of which is in rural towns experiencing population shifts back to cities -- will likely prove hard.

Sam Zell.
Sam Zell.

So far in May, announced store closings are nearly twice that of this time last year, while announced openings are up 20%, according to new data from global think tank Fun Global Retail & Technology. Overall, closings have been announced for 3,296 stores this year, up a disturbing 97% year-over-year. Most of the shuttered stores have come from the department and specialty store categories.

"The industry is in the middle of a major disruption, but there are bright spots, including Bonobos' commitment to physical retail. As we've seen, some retailers are continuing to expand, even as store closures are up markedly from 2016," said Fung Global Retail & Technology Managing Director Deborah Weinswig.

Saying this year has caused some eyes to be open on the state of U.S. bricks-and-mortar retail would be an understatement.

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